Sunday, April 27, 2014

The BGO Rattling House & Home

I have written about BGOs in this bloglogue in the past… BGO translates to Blinding Glimpse of the Obvious.

House and home is a market that is posting a market BGO right before our eyes… and the market gurus from Wall Street to Madison Avenue to Washington are not seeing it.

Over the last few days, the Wall Street Journal posted a couple of stories that shed spotlights on the stage.

One of the stories that ran mid-week last week showcased the big decline in home sales and new home starts.

Like good MBA-accounting journalists, the article was littered with stats comparing sales, mortgage rates and real estate listing stats to support the overall observation that… well… housing is diving quickly back into a slump.

No question that the writers talked about the low-growth recessionary recovery. They cited the new bank regulations and the long process of loan qualification.

They even wrote about the industrial transition with builders and developers.

Ahhh… but they did not cite the BGO!

The article over the weekend titled, “Rentals Reach For The Skies” came a bit closer to showcasing the BGO… but it too reminded me of the kid that comes close to knocking down that Cinco de Mayo clown filled with candy, but just cannot hit it and reap the reward.

The second article noted that there are 74 rental high-rises being built this year across the U.S. and another 81 on the books for next year.

It talks about the young singles and couples paying the premium rents to live intown and near where they work.

One evening last week, I sat at a coffee table with Atlanta community leadership and talked about all the new live-work-play centers that are all the rage here in Atlanta.

We talked a lot about our wonderment of just how long the live-work-play rage will be a rage.

So what’s the BGO… the Blinding Glimpse of the Obvious?

Simple. The Millennials are making their mark right in the midst of us… right in the midst of our here and now.

I’ve rattled in this blog a lot about the Millennials, their sheer size and how they are going to be the market drivers for the next 20–30 years.

They cannot be overlooked, excused or dumb-downed.

We are in the midst of the Millennial tsunami as Brian, Maria, Jasmine and Ethan depart from campus-town and the helicopter-parent nest to stake a home claim of their own.

But the Millennials are facing a record-setting low of down payment savings and record- setting pain-in-the-butt process of securing a mortgage loan.

Rentals are rising as the new American city-scape embrace this tsunami.

Community politico clients are always astounded by the stats that the make-up of their townscape is much more single and rental than they ever imagined that it could be.

House and home manufacturing and retail clients continue to dismiss that the mom-dad-kids-apple-pie-homebody is fading fast.

I am the first to showcase quick service restaurants and their franchisees. A vast array of those teams see the Millennial tsunami and are out their capitalizing on it.

The biggest glitch that the QSR groups are making is an assumption that the Millennials are going to follow a family life-stage transition just like their Boomer parents… marry, move out to the ‘burbs and have kids.

If you don’t see this happening … go check the Burger King brand.

Back to housing.

Home-owners who bought their pads in the 90s and early 2000s are in for a shock when they learn that the homes have way too many walls with outdated countertops, bathrooms and extended outdoor living space.

Real estate agents are in the midst of a shock as they cling to their out-dated commission-agent-driven business model.

And house and home retailers need to either re-adjust or be ready for the arrival of a new competitive mix.

House and home is hip… but it’s not what we see on the pages of Elle Décor or Architectural Digest.

That set of pubs has become a dwindling cliché of New York designers, fashion publishers and high-end boutique retailers that refuse to recognize that life does exist past the Hudson.

To capture what’s really happening, tune in or better yet, pick up an HGTV Magazine. Spend some time on Pinterest and look at the pictures. Go shop at Pier 1 Imports and Target. Go to the local “retro-rehab” furniture store.

The current issues of BOTH Southern Living and Country Living Magazines highlight the new retro-50s headset of the Millennial homemakers — and that’s both the male and female ones!

The housing market is in the midst of radical change.

Rental is the new norm — and probably will here for longer than a “transitional lifestyle” time.

Less is more and more is way too far out of what’s in the checkbook each month.

High touch comfort and multi-use furniture (note… I did not say space — that’s assumed to be there already by the Millennials) is the hip and trendy.

Pre-owned brings in history and neighborhood roots.

Kitchens are center stage and not operational sidekicks.

Color adds personality with window fabrics, area rugs, accent pillows and wall art… even modular flooring that works great in those newly built “post-industrial” lofts.

I am sure that some readers of this bloglogue have a take-away that I might have all the answers…

…But in this situation I don’t.

What I do know is that we need to get out from behind the desks and sit down with Millennials and hear their stories about what they and their friends are doing.

Hey… I am the first to admit that the Millennial ADHD does not make it easy.

But folks, the Millennials are now in the driver’s seat of the future.

That Wall Street Journal article talks about the new high-rise apartment just built in Minneapolis and how its so very not what one would expect.

They talk about how when you get up to the penthouse that posts a rental amount of $9,000 per month you can see the Mississippi River as it meanders southward.

After reading this… go to the newest high-rise apartment tower or live-work-play town center or new “retro” loft complex and take in the vista of the new market horizon and see what you might see.

All I know for sure is that the BGO hitting us right now is the Millennial Generation forming its nests — even if they have to rent it for the next decade or so!

CEO & Discovery Chief at EXPERIENCE Insight Group, Inc. In the business to discover and craft brand experiences that humans seek out and engage in.